IEA: High Oil Prices “Taking A Toll” On Demand

Geopolitics has taken over the oil market, driving oil prices up to three-year highs. The inventory surplus has vanished , and more outages could push oil prices up even higher. Yet, there are some signs that demand is starting to take a hit as oil closes in on $80 per barrel. In the IEA’s May Oil Market Report, the agency said that OPEC might be needed to step in and fill the supply gap if a significant portion of Iran oil goes offline. Saudi Arabia suggested shortly after the U.S. announced its withdrawal from the Iran nuclear deal that OPEC would act to mitigate any supply shortfall should it occur. But while geopolitical fears helped push Brent up to $79 per barrel in recent days, the underlying fundamentals are also mostly bullish. Venezuela’s production is plummeting, and output is 550,000 bpd below it’s agreed upon target as part of […]